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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One) 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended November 30, 2023
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from            to
Commission file number 1-10658

Micron Technology, Inc.
(Exact name of registrant as specified in its charter)
Delaware75-1618004
(State or other jurisdiction of incorporation or organization)(IRS Employer Identification No.)
Address of principal executive offices, including zip code
8000 S. Federal Way, Boise, Idaho 83716-9632
Registrant’s telephone number, including area code
(208) 368-4000
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common Stock, par value $0.10 per shareMUNasdaq Global Select Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.YesNo
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
YesNo
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large Accelerated FilerAccelerated FilerNon-Accelerated FilerSmaller Reporting CompanyEmerging Growth Company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
YesNo

The number of outstanding shares of the registrant’s common stock as of December 14, 2023 was 1,103,908,880.




Table of Contents

micron-logo-black-rgb-75x21.jpg 2

Definitions of Commonly Used Terms

As used herein, “we,” “our,” “us,” and similar terms include Micron Technology, Inc. and its consolidated subsidiaries, unless the context indicates otherwise. Abbreviations, terms, or acronyms are commonly used or found in multiple locations throughout this report and include the following:
TermDefinitionTermDefinition
2024 Term Loan ASenior Term Loan A due October 20242051 Notes3.477% Senior Notes due November 2051
2025 Term Loan A
Senior Term Loan A due November 2025
CAC
China’s Cyberspace Administration
2026 Term Loan A
Senior Term Loan A due November 2026
DDRDouble data rate DRAM
2027 Term Loan A
Senior Term Loan A due November 2027
EBITDAEarnings before interest, taxes, depreciation, and amortization
2026 Notes4.975% Senior Notes due February 2026EUVExtreme ultraviolet lithography
2027 Notes4.185% Senior Notes due February 2027HBM
High-bandwidth memory, a stacked DRAM technology optimized for memory-bandwidth intensive applications
2028 Notes
5.375% Senior Notes due April 2028
LPDRAM
Low-power DRAM
2029 A Notes
5.327% Senior Notes due February 2029
MCP
Multichip packaged solutions with managed NAND and LPDRAM
2029 B Notes
6.750% Senior Notes due November 2029
MicronMicron Technology, Inc. (Parent Company)
2030 Notes4.663% Senior Notes due February 2030NRVNet realizable value
2032 Green Bonds2.703% Senior Notes due April 2032Revolving Credit Facility$2.5 billion Revolving Credit Facility due May 2026
2033 A Notes
5.875% Senior Notes due February 2033
SOFRSecured Overnight Financing Rate
2033 B Notes
5.875% Senior Notes due September 2033
SSDSolid state drive
2041 Notes3.366% Senior Notes due November 2041

We are an industry leader in innovative memory and storage solutions transforming how the world uses information to enrich life for all. With a relentless focus on our customers, technology leadership, and manufacturing and operational excellence, Micron delivers a rich portfolio of high-performance DRAM, NAND, and NOR memory and storage products through our Micron® and Crucial® brands. Every day, the innovations that our people create fuel the data economy, enabling advances in artificial intelligence and 5G applications that unleash opportunities — from the data center to the intelligent edge and across the client and mobile user experience.

Micron, Crucial, any associated logos, and all other Micron trademarks are the property of Micron. Other product names or trademarks that are not owned by Micron are for identification purposes only and may be the trademarks of their respective owners.

Available Information

Investors and others should note that we announce material financial information about our business and products through a variety of means, including our investor relations website (investors.micron.com), filings with the U.S. Securities and Exchange Commission (“SEC”), press releases, public conference calls, blog posts (micron.com/about/blog), and webcasts. We use these channels to achieve broad, non-exclusionary distribution of information to the public and for complying with our disclosure obligations under Regulation FD. Therefore, we encourage investors, the media, and others interested in our company to review the information we post on such channels.


3 | 2024 Q1 10-Q

Forward-Looking Statements

This Form 10-Q contains trend information and other forward-looking statements that involve a number of risks and uncertainties. Such forward-looking statements may be identified by words such as "anticipate," "expect," "intend," "pledge," "committed," "plan," "opportunities," "future," "believe," "target," "on track," "estimate," "continue," "likely," "may," "will," "would," "should," "could," and variations of such words and similar expressions. However, the absence of these words or similar expressions does not mean that a statement is not forward-looking. Specific forward-looking statements include, but are not limited to, statements such as those made regarding potential change in our effective tax rate; the timing for construction and ramping of production for new memory manufacturing fabs in the United States; intent to make investments at our backend facility in Xi’an, China and build a new assembly and test facility in Gujarat, India; expected wafer starts and underutilization charges for the second quarter of 2024, the payment of future cash dividends; market conditions and profitability in our industry; the impact of the Cyberspace Administration of China decision; capital spending in 2024; and the sufficiency of our cash and investments. Our actual results could differ materially from our historical results and those discussed in the forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, those identified in “Part II. Other Information – Item 1A. Risk Factors.”
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS

Micron Technology, Inc.
Consolidated Statements of Operations
(In millions, except per share amounts)
(Unaudited)
Three months endedNovember 30,
2023
December 1,
2022
Revenue$4,726 $4,085 
Cost of goods sold4,761 3,192 
Gross margin(35)893 
Research and development845 849 
Selling, general, and administrative263 251 
Restructure and asset impairments 13 
Other operating (income) expense, net(15)(11)
Operating income (loss)(1,128)(209)
Interest income132 88 
Interest expense(132)(51)
Other non-operating income (expense), net(27)(4)
(1,155)(176)
Income tax (provision) benefit(73)(8)
Equity in net income (loss) of equity method investees
(6)(11)
Net income (loss)$(1,234)$(195)
Earnings (loss) per share
Basic$(1.12)$(0.18)
Diluted(1.12)(0.18)
Number of shares used in per share calculations
Basic1,100 1,090 
Diluted1,100 1,090 

See accompanying notes to consolidated financial statements.
5 | 2024 Q1 10-Q

Micron Technology, Inc.
Consolidated Statements of Comprehensive Income (Loss)
(In millions)
(Unaudited)
Three months endedNovember 30,
2023
December 1,
2022
Net income (loss)$(1,234)$(195)
Other comprehensive income (loss), net of tax
Gains (losses) on derivative instruments44 108 
Unrealized gains (losses) on investments7 (19)
Pension liability adjustments2 1 
Foreign currency translation adjustments(1)(3)
Other comprehensive income (loss)52 87 
Total comprehensive income (loss)$(1,182)$(108)

See accompanying notes to consolidated financial statements.
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Micron Technology, Inc.
Consolidated Balance Sheets
(In millions, except par value amounts)
(Unaudited)
As ofNovember 30,
2023
August 31,
2023
Assets
Cash and equivalents$8,075 $8,577 
Short-term investments973 1,017 
Receivables2,943 2,443 
Inventories8,276 8,387 
Other current assets791 820 
Total current assets21,058 21,244 
Long-term marketable investments720 844 
Property, plant, and equipment37,677 37,928 
Operating lease right-of-use assets648 666 
Intangible assets416 404 
Deferred tax assets781 756 
Goodwill1,150 1,150 
Other noncurrent assets1,326 1,262 
Total assets$63,776 $64,254 
Liabilities and equity
Accounts payable and accrued expenses$3,946 $3,958 
Current debt908 278 
Other current liabilities1,108 529 
Total current liabilities5,962 4,765 
Long-term debt12,597 13,052 
Noncurrent operating lease liabilities601 603 
Noncurrent unearned government incentives705 727 
Other noncurrent liabilities1,026 987 
Total liabilities20,891 20,134 
Commitments and contingencies
Shareholders’ equity
Common stock, $0.10 par value, 3,000 shares authorized, 1,245 shares issued and 1,104 outstanding (1,239 shares issued and 1,098 outstanding as of August 31, 2023)
124 124 
Additional capital11,217 11,036 
Retained earnings39,356 40,824 
Treasury stock, 141 shares held (141 shares as of August 31, 2023)
(7,552)(7,552)
Accumulated other comprehensive income (loss)(260)(312)
Total equity42,885 44,120 
Total liabilities and equity$63,776 $64,254 

See accompanying notes to consolidated financial statements.
7 | 2024 Q1 10-Q

Micron Technology, Inc.
Consolidated Statements of Changes in Equity
(In millions, except per share amounts)
(Unaudited)
Common StockAdditional CapitalRetained EarningsTreasury StockAccumulated Other Comprehensive
Income (Loss)
Total Shareholders’ Equity
Number
of Shares
Amount
Balance at August 31, 20231,239$124 $11,036 $40,824 $(7,552)$(312)$44,120 
Net income (loss)— — — (1,234)— — (1,234)
Other comprehensive income (loss), net— — — — — 52 52 
Stock issued under stock plans8 9 — — — 9 
Stock-based compensation expense— — 188 — — — 188 
Repurchase of stock - withholdings on employee equity awards(2) (16)(105)— — (121)
Dividends and dividend equivalents declared ($0.115 per share)
— — — (129)— — (129)
Balance at November 30, 2023
1,245$124 $11,217 $39,356 $(7,552)$(260)$42,885 


Common StockAdditional CapitalRetained EarningsTreasury StockAccumulated Other Comprehensive
Income (Loss)
Total Shareholders’ Equity
Number
of Shares
Amount
Balance at September 1, 20221,226 $123 $10,197 $47,274 $(7,127)$(560)$49,907 
Net income (loss)— — — (195)— — (195)
Other comprehensive income (loss), net— — — — — 87 87 
Stock issued under stock plans8 7 — — — 7 
Stock-based compensation expense— — 146 — — — 146 
Repurchase of stock - repurchase program— — — — (425)— (425)
Repurchase of stock - withholdings on employee equity awards(2) (15)(80)— — (95)
Dividends and dividend equivalents declared ($0.115 per share)
— — — (126)— — (126)
Balance at December 1, 2022
1,232$123 $10,335 $46,873 $(7,552)$(473)$49,306 

See accompanying notes to consolidated financial statements.
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Micron Technology, Inc.
Consolidated Statements of Cash Flows
(In millions)
(Unaudited)
Three months endedNovember 30,
2023
December 1,
2022
Cash flows from operating activities
Net income (loss)$(1,234)$(195)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:  
Depreciation expense and amortization of intangible assets1,915 1,921 
Stock-based compensation188 146 
Change in operating assets and liabilities:  
Receivables(501)1,842 
Inventories111 (1,697)
Accounts payable and accrued expenses271 (630)
Other current liabilities
579 (430)
Other72 (14)
Net cash provided by operating activities1,401 943 
Cash flows from investing activities  
Expenditures for property, plant, and equipment(1,796)(2,449)
Purchases of available-for-sale securities(199)(90)
Proceeds from maturities and sales of available-for-sale securities
374 362 
Proceeds from government incentives85 2 
Other(22)(91)
Net cash provided by (used for) investing activities(1,558)(2,266)
Cash flows from financing activities  
Payments of dividends to shareholders(129)(126)
Payments on equipment purchase contracts(56)(47)
Repayments of debt(53)(20)
Repurchases of common stock - repurchase program (425)
Proceeds from issuance of debt 3,349 
Other(114)(99)
Net cash provided by (used for) financing activities(352)2,632 
Effect of changes in currency exchange rates on cash, cash equivalents, and restricted cash(1)(6)
Net increase (decrease) in cash, cash equivalents, and restricted cash(510)1,303 
Cash, cash equivalents, and restricted cash at beginning of period8,656 8,339 
Cash, cash equivalents, and restricted cash at end of period$8,146 $9,642 

See accompanying notes to consolidated financial statements.
9 | 2024 Q1 10-Q

Micron Technology, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All tabular amounts in millions, except per share amounts)
(Unaudited)

Significant Accounting Policies

For a discussion of our significant accounting policies, see “Part II – Item 8. Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Significant Accounting Policies” of our Annual Report on Form 10-K for the year ended August 31, 2023. There have been no changes to our significant accounting policies since our Annual Report on Form 10-K for the year ended August 31, 2023.

Basis of Presentation

The accompanying consolidated financial statements include the accounts of Micron Technology, Inc. and our consolidated subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) consistent in all material respects with those applied in our Annual Report on Form 10-K for the year ended August 31, 2023.

In the opinion of our management, the accompanying unaudited consolidated financial statements contain all necessary adjustments, consisting of a normal recurring nature, to fairly state the financial information set forth herein. Certain reclassifications have been made to prior period amounts to conform to current period presentation.

Our fiscal year is the 52 or 53-week period ending on the Thursday closest to August 31. Fiscal years 2024 and 2023 each contain 52 weeks. All period references are to our fiscal periods unless otherwise indicated. These interim financial statements should be read in conjunction with the consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended August 31, 2023.


Variable Interest Entities

A number of special purpose entities (the "Lease SPEs") were created by a third-party to facilitate equipment lease financing transactions between us and financial institutions that fund the lease financing transactions ("Financing Entities"). Neither we nor the Financing Entities have an equity interest in the Lease SPEs. The Lease SPEs are variable interest entities because their equity is not sufficient to permit them to finance their activities without additional support from the Financing Entities and because the third-party equity holder lacks characteristics of a controlling financial interest. By design, the arrangements with the Lease SPEs are merely financing vehicles and we do not bear any significant risks from variable interests with the Lease SPEs. We have determined that we do not have the power to direct the activities of the Lease SPEs that most significantly impact their economic performance and we do not consolidate the Lease SPEs. As of November 30, 2023, we had approximately $250 million of financial lease liabilities and right-of-use assets under these arrangements.
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Cash and Investments

All of our short-term investments and long-term marketable investments were classified as available-for-sale as of the dates noted below. Cash and equivalents and the fair values of our available-for-sale investments, which approximated amortized costs, were as follows:
As of November 30, 2023As of August 31, 2023
Cash and EquivalentsShort-term Investments
Long-term Marketable Investments(1)
Total Fair ValueCash and EquivalentsShort-term Investments
Long-term Marketable Investments(1)
Total Fair Value
Cash$5,400 $ $ $5,400 $5,771 $ $ $5,771 
Level 1(2)
Money market funds1,570   1,570 1,629   1,629 
Level 2(3)
Certificates of deposit1,090 26  1,116 1,172 25  1,197 
Corporate bonds 681 359 1,040  737 437 1,174 
Asset-backed securities 16 349 365  15 387 402 
Government securities15 152 12 179 5 131 20 156 
Commercial paper 98  98  109  109 
8,075 $973 $720 $9,768 8,577 $1,017 $844 $10,438 
Restricted cash(4)
71 79 
Cash, cash equivalents, and restricted cash$8,146 $8,656 
(1)The maturities of long-term marketable investments primarily range from one to five years, except for asset-backed securities which are not due at a single maturity date.
(2)The fair value of Level 1 securities is measured based on quoted prices in active markets for identical assets.
(3)The fair value of Level 2 securities is measured using information obtained from pricing services, which obtain quoted market prices for similar instruments, non-binding market consensus prices that are corroborated by observable market data, or various other methodologies, to determine the appropriate value at the measurement date. We perform supplemental analysis to validate information obtained from these pricing services. No adjustments were made to the fair values indicated by such pricing information as of November 30, 2023 or August 31, 2023.
(4)Restricted cash is included in other current assets and other noncurrent assets and primarily relates to certain government incentives received prior to being earned and for which restrictions lapse upon achieving certain performance conditions or which will be returned if performance conditions are not met.

Gross realized gains and losses from sales of available-for-sale securities were not significant for any period presented.

Non-marketable Equity Investments

In addition to the amounts included in the table above, we had $188 million and $218 million of non-marketable equity investments without a readily determinable fair value that were included in other noncurrent assets as of November 30, 2023 and August 31, 2023, respectively. We recognized losses in other non-operating income (expense) on our non-marketable investments of $31 million for the first quarter of 2024 and net losses of $7 million for the first quarter of 2023. Our non-marketable equity investments are recorded at fair value on a non-recurring basis and classified as Level 3.


11 | 2024 Q1 10-Q

Receivables
As ofNovember 30,
2023
August 31,
2023
Trade receivables$2,478 $2,048 
Income and other taxes217 194 
Other248 201 
$2,943 $2,443 


Inventories
As ofNovember 30,
2023
August 31,
2023
Finished goods$1,282 $1,616 
Work in process6,334 6,111 
Raw materials and supplies660 660 
$8,276 $8,387 


Property, Plant, and Equipment
As ofNovember 30,
2023
August 31,
2023
Land$283 $283 
Buildings18,652 17,967 
Equipment(1)
66,392 65,555 
Construction in progress(2)
2,215 2,464 
Software1,377 1,316 
 88,919 87,585 
Accumulated depreciation(51,242)(49,657)
 $37,677 $37,928 
(1)Includes costs related to equipment not placed into service of $2.88 billion as of November 30, 2023 and $2.91 billion as of August 31, 2023.
(2)Includes building-related construction, tool installation, and software costs for assets not placed into service.


Intangible Assets
As of November 30, 2023As of August 31, 2023
Gross
Amount
Accumulated
Amortization
Net Carrying AmountGross
Amount
Accumulated
Amortization
Net Carrying Amount
Product and process technology$631 $(226)$405 $613 $(209)$404 
Other
11  11    
$642 $(226)$416 $613 $(209)$404 

In the first quarters of 2024 and 2023, we capitalized $22 million and $30 million, respectively, for product and process technology with weighted-average useful lives of 9 years and 10 years, respectively. Amortization expense was $20 million and $23 million for the first three months of 2024 and 2023, respectively. Expected amortization expense is $59 million for the remainder of 2024, $54 million for 2025, $50 million for 2026, $46 million for 2027, and $44 million for 2028.
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Leases

The components of lease cost are presented below:
Three months endedNovember 30, 2023December 1, 2022
Finance lease cost
Amortization of right-of-use asset$32 $24 
Interest on lease liability6 6 
Operating lease cost(1)
33 36 
$71 $66 
(1)Operating lease cost includes short-term and variable lease expenses, which were not material for the periods presented.

Supplemental cash flow information related to leases was as follows:
Three months endedNovember 30, 2023December 1, 2022
Cash flows used for operating activities
Finance leases
$6 $5 
Operating leases
33 33 
Cash flows used for financing activities – Finance leases27 20 
Noncash acquisitions of right-of-use assets
Finance leases217 43 
Operating leases
 35 

Supplemental balance sheet information related to leases was as follows:
As ofNovember 30,
2023
August 31,
2023
Finance lease right-of-use assets (included in property, plant, and equipment)
$1,497 $1,311 
Current operating lease liabilities (included in accounts payable and accrued expenses)62 66 
Weighted-average remaining lease term (in years)
Finance leases
89
Operating leases
1111
Weighted-average discount rate
Finance leases
4.25 %3.86 %
Operating leases
3.23 %3.21 %

13 | 2024 Q1 10-Q

As of November 30, 2023, maturities of lease liabilities by fiscal year were as follows:
For the year endingFinance LeasesOperating Leases
Remainder of 2024$204 $50 
2025255 77 
2026241 76 
2027235 76 
2028225 74 
2029 and thereafter541 453 
Less imputed interest(220)(143)
$1,481 $663 

The table above excludes obligations for leases that have been executed but have not yet commenced. As of November 30, 2023, excluded obligations consisted of $122 million of finance lease obligations over a weighted-average period of 8 years for gas supply arrangements deemed to contain embedded leases and equipment leases. We will recognize right-of-use assets and associated lease liabilities at the time such assets become available for our use.


Accounts Payable and Accrued Expenses
As ofNovember 30,
2023
August 31,
2023
Accounts payable$1,721 $1,725 
Property, plant, and equipment1,197 1,419 
Salaries, wages, and benefits621 367 
Income and other taxes97 67 
Other310 380 
$3,946 $3,958 


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Debt
As of November 30, 2023As of August 31, 2023
Net Carrying AmountNet Carrying Amount
Stated RateEffective RateCurrentLong-TermTotalCurrentLong-TermTotal
2024 Term Loan A6.163 %6.20 %$587 $ $587 $ $587 $587 
2025 Term Loan A6.698 %6.83 % 1,050 1,050  1,050 1,050 
2026 Term Loan A6.823 %6.96 %49 909 958 49 921 970 
2027 Term Loan A6.948 %7.09 %57 1,049 1,106 57 1,063 1,120 
2026 Notes
4.975 %5.07 % 499 499  499 499 
2027 Notes(1)
4.185 %4.27 % 797 797  798 798 
2028 Notes5.375 %5.52 % 597 597  596 596 
2029 A Notes5.327 %5.40 % 697 697  697 697 
2029 B Notes6.750 %6.54 % 1,263 1,263  1,263 1,263 
2030 Notes
4.663 %4.73 % 847 847  846 846 
2032 Green Bonds2.703 %2.77 % 995 995  995 995 
2033 A Notes5.875 %5.96 % 745 745  745 745 
2033 B Notes5.875 %6.01 % 890 890  890 890 
2041 Notes3.366 %3.41 % 497 497  497 497 
2051 Notes3.477 %3.52 % 496 496  496 496 
Finance lease obligations
N/A4.25 %215 1,266 1,481 172 1,109 1,281 
 
$908 $12,597 $13,505 $278 $13,052 $13,330 
(1) In 2021, we entered into fixed-to-floating interest rate swaps on the 2027 Notes with an aggregate $900 million notional amount equal to the principal amount of the 2027 Notes. The resulting variable interest paid is at a rate equal to SOFR plus approximately 3.33%. The fixed-to-floating interest rate swaps are accounted for as fair value hedges, and as a result, the carrying values of our 2027 Notes reflect adjustments in fair value.

Revolving Credit Facility

As of November 30, 2023, no amounts were outstanding under the Revolving Credit Facility and $2.50 billion was available to us. Under the Revolving Credit Facility, borrowings would generally bear interest at a rate equal to adjusted term SOFR plus 1.00% to 1.75%, depending on our corporate credit ratings. Adjusted term SOFR for the Revolving Credit Facility agreement is the SOFR benchmark plus a credit spread adjustment ranging from approximately 0.11% to 0.43% depending on the applicable interest period selected. Any amounts outstanding under the Revolving Credit Facility would mature in May 2026 and amounts borrowed may be prepaid without penalty.

The Revolving Credit Facility requires us to maintain, on a consolidated basis, a leverage ratio of total indebtedness to adjusted EBITDA, as defined in the Revolving Credit Facility and calculated as of the last day of each fiscal quarter, not to exceed 3.25 to 1.00. On March 27, 2023, we amended the Revolving Credit Facility to provide that in lieu of the foregoing leverage ratio, during the fourth quarter of 2023 and each quarter of 2024, we will be required to maintain, on a consolidated basis, a net leverage ratio of total net indebtedness to adjusted EBITDA, as defined in the Revolving Credit Facility and calculated as of the last day of each fiscal quarter, not to exceed 3.25 to 1.00. Alternatively, for up to three of such five quarters, we may elect to comply with a requirement of minimum liquidity, as defined in the Revolving Credit Facility, of not less than $5.0 billion. In the fourth quarter of 2023 and first quarter of 2024, we complied with the net leverage ratio requirement. Each of the leverage ratio and net leverage ratio maximums, as applicable, is subject to a temporary four quarter increase in such ratio to 3.75 to 1.00 following certain material acquisitions.

15 | 2024 Q1 10-Q

Maturities of Notes Payable

As of November 30, 2023, maturities of notes payable by fiscal year were as follows:
Remainder of 2024
$81 
2025695 
20261,659 
20271,780 
20281,492 
2029 and thereafter6,450 
Unamortized issuance costs, discounts, and premium, net(32)
Hedge accounting fair value adjustment(101)
$12,024 


Contingencies

We are currently a party to legal actions other than those described below arising from the normal course of business, none of which are expected to have a material adverse effect on our business, results of operations, or financial condition.

Patent Matters

As is typical in the semiconductor and other high-tech industries, from time to time, others have asserted, and may in the future assert, that our products or manufacturing processes infringe upon their intellectual property rights.

On March 19, 2018, Micron Semiconductor (Xi’an) Co., Ltd. (“MXA”) was served with a patent infringement complaint filed by Fujian Jinhua Integrated Circuit Co., Ltd. (“Jinhua”) in the Fuzhou Intermediate People’s Court in Fujian Province, China (the “Fuzhou Court”). On April 3, 2018, Micron Semiconductor (Shanghai) Co. Ltd. (“MSS”) was served with the same complaint. The complaint alleged that MXA and MSS infringed one Chinese patent by manufacturing and selling certain Crucial DDR4 DRAM modules. The complaint sought an order requiring MXA and MSS to destroy inventory of the accused products and equipment for manufacturing the accused products in China; to stop manufacturing, using, selling, and offering for sale the accused products in China; and to pay damages of 98 million Chinese yuan plus court fees incurred. On December 4, 2023, Micron and Jinhua entered a settlement agreement under which Jinhua will file an application to the Fuzhou Court to withdraw its complaints against MXA and MSS.

On March 21, 2018, MXA was served with a patent infringement complaint filed by United Microelectronics Corporation (“UMC”) in the Fuzhou Court. On April 3, 2018, MSS was served with the same complaint. The complaint alleges that MXA and MSS infringed one Chinese patent by manufacturing and selling certain Crucial DDR4 DRAM modules. The complaint seeks an order requiring MXA and MSS to destroy inventory of the accused products and equipment for manufacturing the accused products in China; to stop manufacturing, using, selling, and offering for sale the accused products in China; and to pay damages of 90 million Chinese yuan plus court fees incurred. On November 26, 2021, pursuant to a settlement agreement between UMC and Micron, UMC filed an application to the Fuzhou Court to withdraw its complaints against MXA and MSS.

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On April 3, 2018, MSS was served with another patent infringement complaint filed by Jinhua and an additional complaint filed by UMC in the Fuzhou Court. The additional complaints alleged that MSS infringed two Chinese patents by manufacturing and selling certain Crucial MX300 SSDs. The complaint filed by UMC sought an order requiring MSS to destroy inventory of the accused products and equipment for manufacturing the accused products in China; to stop manufacturing, using, selling, and offering for sale the accused products in China; and to pay damages of 90 million Chinese yuan plus court fees incurred. The complaint filed by Jinhua sought an order requiring MSS to destroy inventory of the accused products and equipment for manufacturing the accused products in China; to stop manufacturing, using, selling, and offering for sale the accused products in China; and to pay damages of 98 million Chinese yuan plus court fees incurred. On November 26, 2021, pursuant to a settlement agreement between UMC and Micron, UMC filed an application to the Fuzhou Court to withdraw its complaint against MSS. On December 4, 2023, Micron and Jinhua entered a settlement agreement under which Jinhua will file an application to the Fuzhou Court to withdraw its complaint against MSS.

On July 5, 2018, MXA and MSS were notified that the Fuzhou Court granted a preliminary injunction against those entities that enjoins them from manufacturing, selling, or importing certain Crucial and Ballistix-branded DRAM modules and solid-state drives in China. On December 4, 2023, Micron and Jinhua entered a settlement agreement under which Jinhua will file an application to the Fuzhou Court to withdraw the injunction.

On April 28, 2021, Netlist, Inc. (“Netlist”) filed two patent infringement actions against Micron, Micron Semiconductor Products, Inc. (“MSP”), and Micron Technology Texas, LLC (“MTEC”) in the U.S. District Court for the Western District of Texas. The first complaint alleges that one U.S. patent is infringed by certain of our non-volatile dual in-line memory modules. The second complaint alleges that three U.S. patents are infringed by certain of our load-reduced dual in-line memory modules (“LRDIMMs”). Each complaint seeks injunctive relief, damages, attorneys’ fees, and costs. On March 31, 2022, Netlist filed a patent infringement complaint against Micron and Micron Semiconductor Germany, GmbH in Dusseldorf Regional Court alleging that two German patents are infringed by certain of our LRDIMMs. The complaint seeks damages, costs, and injunctive relief. On June 10, 2022, Netlist filed a patent infringement complaint against Micron, MSP, and MTEC in the U.S. District Court for the Eastern District of Texas (“E.D. Tex.”) alleging that six U.S. patents are infringed by certain of our memory modules and HBM products. On August 1, 2022, Netlist filed a second patent infringement complaint against the same defendants in E.D. Tex. alleging that one U.S. patent is infringed by certain of our LRDIMMs. On August 15, 2022, Netlist amended the second complaint to assert that two additional U.S. patents are infringed by certain of our LRDIMMs. The complaints in E.D. Tex. seek injunctive relief, damages, and attorneys’ fees.

On August 16, 2022, Sonrai Memory Ltd. filed a patent infringement complaint against Micron in the U.S. District Court for the Western District of Texas. The complaint alleges that two U.S. patents are infringed by certain SSD and NAND flash products. The complaint seeks damages, attorneys’ fees, and costs.

On January 23, 2023, Besang Inc. filed a patent infringement complaint against Micron in the U.S. District Court for the Eastern District of Texas. The complaint alleges that one U.S. patent is infringed by certain of our 3D NAND and SSD products. The complaint seeks an injunction, damages, attorneys’ fees, and costs.

On November 9, 2023, Yangtze Memory Technologies Company, Ltd. (“YMTC”) filed a patent infringement complaint against Micron and one of its subsidiaries in the U.S. District Court for the Northern District of California. The complaint alleges that eight U.S. patents are infringed by certain of our 3D NAND products. The complaint seeks an injunction, damages, attorneys’ fees, and costs.

Among other things, the above lawsuits pertain to substantially all of our DRAM, NAND, and other memory and storage products we manufacture, which account for substantially all of our revenue.

Antitrust Matters

Six cases have been filed against Micron alleging price fixing of DRAM products in the following Canadian courts on the dates indicated: Superior Court of Quebec (April 30, 2018 and May 3, 2018), the Federal Court of Canada (May 2, 2018), the Ontario Superior Court of Justice (May 15, 2018), and the Supreme Court of British Columbia (May 10, 2018). The plaintiffs in these cases are individuals seeking certification of class actions on behalf of direct and indirect purchasers of DRAM in Canada (or regions of Canada) between June 1, 2016 and February 1, 2018.

17 | 2024 Q1 10-Q

On May 15, 2018, the Chinese State Administration for Market Regulation (“SAMR”) notified Micron that it was investigating potential collusion and other anticompetitive conduct by DRAM suppliers in China. On May 31, 2018, SAMR made unannounced visits to our sales offices in Beijing, Shanghai, and Shenzhen to seek certain information as part of its investigation. We are cooperating with SAMR in its investigation.

Securities Matters

On February 9, 2021, a derivative complaint was filed by a shareholder against Sanjay Mehrotra and other current and former directors of Micron, allegedly on behalf of and for the benefit of Micron, in the U.S. District Court for the District of Delaware alleging violations of securities laws, breaches of fiduciary duties, and other violations of law involving allegedly false and misleading statements about Micron’s commitment to diversity and progress in diversifying its workforce, executive leadership, and Board of Directors. The complaint sought damages, fees, interest, costs, and an order requiring Micron to take various actions to allegedly improve its corporate governance and internal procedures. On November 2, 2023, the District Court granted the defendants’ motion to dismiss the complaint.

Other Matters

In the normal course of business, we are a party to a variety of agreements pursuant to which we may be obligated to indemnify another party. It is not possible to predict the maximum potential amount of future payments under these types of agreements due to the conditional nature of our obligations and the unique facts and circumstances involved in each particular agreement. Historically, our payments under these types of agreements have not had a material adverse effect on our business, results of operations, or financial condition.

Contingency Assessment

We are unable to predict the outcome of any of the matters noted above and cannot make a reasonable estimate of the potential loss or range of possible losses. A determination that our products or manufacturing processes infringe the intellectual property rights of others or entering into a license agreement covering such intellectual property could result in significant liability and/or require us to make material changes to our products and/or manufacturing processes. Any of the foregoing, as well as the resolution of any other legal matter noted above, could have a material adverse effect on our business, results of operations, or financial condition.


Equity

Common Stock Repurchases

Our Board of Directors has authorized the discretionary repurchase of up to $10 billion of our outstanding common stock through open-market purchases, block trades, privately-negotiated transactions, derivative transactions, and/or pursuant to Rule 10b5-1 trading plans. The repurchase authorization has no expiration date, does not obligate us to acquire any common stock, and is subject to market conditions and our ongoing determination of the best use of available cash. No shares were repurchased in the first quarter of 2024. Through November 30, 2023, we had repurchased an aggregate of $6.89 billion under the authorization. Amounts repurchased are included in treasury stock.

Dividends

In the first quarter of 2024, we declared and paid dividends of $129 million ($0.115 per share). On December 20, 2023, our Board of Directors declared a quarterly dividend of $0.115 per share, payable in cash on January 18, 2024, to shareholders of record as of the close of business on January 2, 2024.

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Accumulated Other Comprehensive Income (Loss)

Changes in accumulated other comprehensive income (loss) by component for the three months ended November 30, 2023 were as follows:
Gains (Losses) on Derivative InstrumentsUnrealized Gains (Losses) on InvestmentsPension Liability AdjustmentsCumulative Foreign Currency Translation AdjustmentTotal
As of August 31, 2023$(304)$(41)$36 $(3)$(312)
Other comprehensive income (loss) before reclassifications
14 7  (1)20 
Amount reclassified out of accumulated other comprehensive income (loss)
44  2  46 
Tax effects
(14)   (14)
Other comprehensive income (loss)44 7 2 (1)52 
As of November 30, 2023$(260)$(34)$38 $(4)$(260)


Fair Value Measurements

The estimated fair values and carrying values of our outstanding debt instruments were as follows:
As of November 30, 2023As of August 31, 2023
Fair
Value
Carrying
Value
Fair
Value
Carrying
Value
Notes$11,651 $12,024 $11,549 $12,049 

The fair values of our debt instruments were estimated based on Level 2 inputs, including the trading price of our notes when available, discounted cash flows, and interest rates based on similar debt issued by parties with credit ratings similar to ours.


19 | 2024 Q1 10-Q

Derivative Instruments
Notional or Contractual AmountFair Value of
Assets(1)
Liabilities(2)
As of November 30, 2023
Derivative instruments with hedge accounting designation
Cash flow currency hedges
$4,057 $34 $(139)
Cash flow commodity hedges310 25 (2)
Fair value interest rate hedges900  (101)
Derivative instruments without hedge accounting designation
Non-designated currency hedges
1,860 23 (20)
$82 $(262)
As of August 31, 2023
Derivative instruments with hedge accounting designation
Cash flow currency hedges
$3,873 $16 $(180)
    Cash flow commodity hedges331 45  
    Fair value interest rate hedges900  (100)
Derivative instruments without hedge accounting designation
Non-designated currency hedges
1,839 2 (17)
$63 $(297)
(1)Included in receivables and other noncurrent assets.
(2)Included in accounts payable and accrued expenses and other noncurrent liabilities.

Derivative Instruments with Hedge Accounting Designation

Cash Flow Hedges: We utilize forward and swap contracts that generally mature within two years designated as cash flow hedges to minimize our exposure to changes in currency exchange rates or commodity prices for certain capital expenditures and manufacturing costs. Forward and swap contracts are measured at fair value based on market-based observable inputs including market spot and forward rates, interest rates, and credit-risk spreads (Level 2). We recognized gains from cash flow hedges of $53 million for the first quarter of 2023 in accumulated other comprehensive income (loss). The amounts recognized in the first quarter of 2024 were not significant. As of November 30, 2023, we expect to reclassify $153 million of pre-tax losses related to cash flow hedges from accumulated other comprehensive income (loss) into earnings in the next 12 months.

Fair Value Hedges: We utilize fixed-to-floating interest rate swaps designated as fair value hedges to minimize certain exposures to changes in the fair value of fixed-rate debt that result from fluctuations in benchmark interest rates. Interest rate swaps are measured at fair value based on market-based observable inputs including interest rates and credit-risk spreads (Level 2). The changes in the fair values of derivatives designated as fair value hedges and the offsetting changes in the underlying fair values of the hedged items are both recognized in earnings. When a derivative is no longer designated as a fair value hedge for any reason, including termination and maturity, the remaining unamortized difference between the carrying value of the hedged item at that time and the face value of the hedged item is amortized to earnings over the remaining life of the hedged item, or immediately if the hedged item has matured or been extinguished. The effects of fair value hedges on our consolidated statements of operations, recognized in interest expense, were not significant for the periods presented.

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Derivative Instruments without Hedge Accounting Designation

Currency Derivatives: We generally utilize a rolling hedge strategy with currency forward contracts that mature within three months to hedge our exposures of monetary assets and liabilities from changes in currency exchange rates. At the end of each reporting period, monetary assets and liabilities denominated in currencies other than the U.S. dollar are remeasured into U.S. dollars and the associated outstanding forward contracts are marked to market. Currency forward contracts are valued at fair values based on the middle of bid and ask prices of dealers or exchange quotations (Level 2). Realized and unrealized gains and losses on derivative instruments without hedge accounting designation as well as the changes in the underlying monetary assets and liabilities from changes in currency exchange rates are included in other non-operating income (expense), net. The amounts recognized for derivative instruments without hedge accounting designation were not significant for the periods presented. We do not use derivative instruments for speculative purposes.


Equity Plans

As of November 30, 2023, 74 million shares of our common stock were available for future awards under our equity plans, including 14 million shares approved for issuance under our employee stock purchase plan (“ESPP”).

Restricted Stock and Restricted Stock Units (“Restricted Stock Awards”)

Restricted Stock Awards activity is summarized as follows:

Three months endedNovember 30, 2023December 1,
2022
Restricted stock award shares granted1214
Weighted-average grant-date fair value per share$67.36 $53.94 

Stock-based Compensation Expense

Stock-based compensation expense recognized in our statements of operations is presented below. Stock-based compensation expense of $94 million and $88 million was capitalized and remained in inventory as of November 30, 2023 and August 31, 2023, respectively.

Three months endedNovember 30, 2023December 1, 2022
Stock-based compensation expense by caption
Research and development$68 $53 
Cost of goods sold67 36 
Selling, general, and administrative47 37 
$182 $126 
Stock-based compensation expense by type of award
Restricted stock awards$163 $109 
ESPP19 17 
$182 $126 

As of November 30, 2023, $1.84 billion of total unrecognized compensation costs for unvested awards, before the effect of any future forfeitures, was expected to be recognized through the first quarter of 2028, resulting in a weighted-average period of 1.4 years.

21 | 2024 Q1 10-Q

Revenue and Customer Contract Liabilities

Revenue is primarily recognized at a point in time when control of the promised goods is transferred to our customers in an amount that reflects the consideration we expect to be entitled to in exchange for those goods. Substantially all contracts with our customers are short-term in duration at fixed, negotiated prices with payment generally due shortly after delivery. From time to time, we have contracts with initial terms that include performance obligations that extend beyond one year. As of November 30, 2023, our future performance obligations beyond one year were not significant.

Revenue by Technology

Three months endedNovember 30, 2023December 1, 2022
DRAM$3,427 $2,829 
NAND1,230 1,103 
Other (primarily NOR)
69 153 
$4,726 $4,085 

See “Segment and Other Information” for disclosure of disaggregated revenue by market segment.

Customer Contract Liabilities

Contract liabilities from customer prepayments made to secure product supply in future periods were approximately $600 million as of November 30, 2023 and were reported within other current liabilities.

As of November 30, 2023 and August 31, 2023, other current liabilities also included $455 million and $453 million, respectively, for estimates of consideration payable to customers including estimates for pricing adjustments and returns.


Income Taxes

Our income tax (provision) benefit consisted of the following:
Three months endedNovember 30, 2023December 1, 2022
Income (loss) before taxes
$(1,155)$(176)
Income tax (provision) benefit
(73)(8)
Effective tax rate
(6.3)%(4.5)%

For the first quarter of 2024, we recorded tax expense based on actual first quarter results for jurisdictions where small changes in our projected pre-tax income may cause significant changes in the estimated annual effective tax rate.

The change in our effective tax rate for the first quarter of 2024 as compared to the first quarter of 2023 was primarily due to changes in levels of profitability, interim tax expense methodology, and our geographic mix of earnings. Despite a consolidated pre-tax loss on a worldwide basis, we have taxes payable in certain geographies due to minimum taxable income reportable in those geographies.

We operate in a number of jurisdictions outside the United States, including Singapore, where we have tax incentive arrangements. These incentives expire, in whole or in part, at various dates through 2034 and are conditional, in part, upon meeting certain business operations and employment thresholds. As a result of a loss before taxes and geographic mix of income, the benefit from tax incentive arrangements was not material for the first quarters of 2024 and 2023.
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Earnings Per Share
Three months endedNovember 30, 2023December 1, 2022
Net income (loss) – Basic and Diluted$(1,234)$(195)
Weighted-average common shares outstanding – Basic and Diluted
1,100 1,090 
Earnings (loss) per share
Basic$(1.12)$(0.18)
Diluted(1.12)(0.18)

Antidilutive potential common shares excluded from the computation of diluted earnings per share, that could dilute basic earnings per share in the future, were 35 million for the first quarter of 2024 and 2023.


Segment and Other Information

Segment information reported herein is consistent with how it is reviewed and evaluated by our chief operating decision maker. We have the following four business units, which are our reportable segments:

Compute and Networking Business Unit (“CNBU”): Includes memory products and solutions sold into client, cloud server, enterprise, graphics, and networking markets.
Mobile Business Unit (“MBU”): Includes memory and storage products sold into smartphone and other mobile-device markets.
Embedded Business Unit (“EBU”): Includes memory and storage products and solutions sold into automotive, industrial, and consumer markets.
Storage Business Unit (“SBU”): Includes SSDs and component-level solutions sold into enterprise and cloud, client, and consumer storage markets.

Certain operating expenses directly associated with the activities of a specific segment are charged to that segment. Other indirect operating income and expenses are generally allocated to segments based on their respective percentage of cost of goods sold or forecasted wafer production. We do not identify or report internally our assets (other than goodwill) or capital expenditures by segment, nor do we allocate gains and losses from equity method investments, interest, other non-operating income or expense items, or taxes to segments.

23 | 2024 Q1 10-Q

Three months endedNovember 30, 2023December 1, 2022
Revenue
CNBU$1,737 $1,746 
MBU1,293 655 
EBU1,037 1,000 
SBU653 680 
All Other6 4 
$4,726 $4,085 
Operating income (loss)
CNBU$(397)$190 
MBU(687)(195)
EBU10 194 
SBU(490)(257)
All Other4 3 
(1,560)(65)
Unallocated
Lower costs from sale of inventory written down in prior periods605  
Stock-based compensation(182)(126)
Restructure and asset impairments (13)
Other9 (5)
432 (144)
Operating income (loss)
$(1,128)$(209)


Certain Concentrations

Revenue by end market as an approximate percent of total revenue is presented in the table below:
Three months endedNovember 30, 2023December 1, 2022
Mobile25 %15 %
Automotive, industrial, and consumer20 %25 %
Client and graphics20 %15 %
Enterprise and cloud server15 %20 %
SSDs and other storage15 %15 %


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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This discussion should be read in conjunction with the consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended August 31, 2023. All period references are to our fiscal periods unless otherwise indicated. Our fiscal year is the 52 or 53-week period ending on the Thursday closest to August 31. Fiscal 2024 and 2023 each contain 52 weeks. All tabular dollar amounts are in millions, except per share amounts.

Overview

We are an industry leader in innovative memory and storage solutions transforming how the world uses information to enrich life for all. With a relentless focus on our customers, technology leadership, and manufacturing and operational excellence, Micron delivers a rich portfolio of high-performance DRAM, NAND, and NOR memory and storage products through our Micron® and Crucial® brands. Every day, the innovations that our people create fuel the data economy, enabling advances in artificial intelligence and 5G applications that unleash opportunities — from the data center to the intelligent edge and across the client and mobile user experience.

We manufacture our products at wholly-owned facilities and also utilize subcontractors for certain manufacturing processes. Our global network of manufacturing centers of excellence not only allows us to benefit from scale while streamlining processes and operations, but it also brings together some of the world’s brightest talent to work on the most advanced memory technology. Centers of excellence bring expertise together in one location, providing an efficient support structure for end-to-end manufacturing, with quicker cycle times, in partnership with teams such as research and development (“R&D”), product engineering, human resources, procurement, and supply chain. For our locations in Singapore and Taiwan, this is also a combination of bringing fabrication and back-end manufacturing together. We make significant investments to develop proprietary product and process technology, which generally increases bit density per wafer and reduces per-bit manufacturing costs of each generation of product. We continue to introduce new generations of products that offer improved performance characteristics, including higher data transfer rates, advanced packaging solutions, lower power consumption, improved read/write reliability, and increased memory density.

We face intense competition in the semiconductor memory and storage markets and to remain competitive we must continuously develop and implement new products and technologies and decrease manufacturing costs in spite of ongoing inflationary cost pressures. Our success is largely dependent on obtaining returns on our R&D investments, efficient utilization of our manufacturing infrastructure, development and integration of advanced product and process technologies, market acceptance of our diversified portfolio of semiconductor-based memory and storage solutions, and efficient capital spending.

Product Technologies

Our product portfolio of memory and storage solutions, advanced solutions, and storage platforms is based on our high-performance semiconductor memory and storage technologies, including DRAM, NAND, and NOR. We sell our products into various markets through our business units in numerous forms, including components, modules, SSDs, managed NAND, MCPs, and wafers. Our system-level solutions, including SSDs and managed NAND, combine NAND, a controller, firmware, and in some cases DRAM.

DRAM: DRAM products are dynamic random access memory semiconductor devices with low latency that provide high-speed data retrieval with a variety of performance characteristics. DRAM products lose content when power is turned off (“volatile”) and are most commonly used in client, cloud server, enterprise, networking, graphics, industrial, and automotive markets. LPDRAM products, which are engineered to meet standards for performance and power consumption, are sold into smartphone and other mobile-device markets (including client markets for Chromebooks and notebook PCs), as well as into the automotive, industrial, consumer, and datacenter markets.

25 | 2024 Q1 10-Q

NAND: NAND products are non-volatile, re-writeable semiconductor storage devices that provide high-capacity, low-cost storage with a variety of performance characteristics. NAND is used in SSDs for the enterprise and cloud, client, consumer, and automotive markets and in removable storage markets. Managed NAND is used in smartphones and other mobile devices, and in consumer, automotive, and embedded markets. Low-density NAND is ideal for applications like automotive, surveillance, machine-to-machine, automation, printer, and home networking.

NOR: NOR products are non-volatile, re-writable semiconductor memory devices that provide fast read speeds. NOR is most commonly used for reliable code storage (e.g., boot, application, operating system, and execute-in-place code in an embedded system) and for frequently changing small data storage and is ideal for automotive, industrial, and consumer applications.

Industry Conditions

The memory and storage industry environment deteriorated sharply in the fourth quarter of 2022 and throughout 2023 due to weak demand in many end markets combined with global and macroeconomic challenges and lower demand resulting from customer actions to reduce inventory levels. This led to significant reductions in average selling prices for both DRAM and NAND and reductions in bit shipments for DRAM, resulting in declines in revenue across all our business segments and nearly all our end markets. For the first quarter of 2024, improving demand growth driven in part by deployment of artificial intelligence, customer inventory normalization, and industry-wide supply discipline, resulted in an improved industry supply and demand balance. As a result, we have experienced improvements in pricing and margins.

As a result of challenging market conditions that have persisted since the fourth quarter of 2022 and increased levels of our inventories, in recent quarters we have reduced capital expenditures and wafer starts for both DRAM and NAND. We expect wafer starts will remain below peak capacity levels for the second quarter of 2024 as we remain focused on managing down our inventories and controlling our supply. We recognized period costs from fabrication facility underutilization of $165 million in first quarter of 2024 and $222 million in the fourth quarter of 2023 due to wafer start reductions. We expect reduced underutilization charges in the second quarter of 2024. In addition, we have strategically diverted underutilized equipment toward ramping new technology nodes, which will help us increase leading edge production in a capital efficient manner. Since the number of wafer processing steps is higher for leading-edge nodes, this approach of diverting underutilized tools to the leading edge meaningfully reduces our overall wafer capacity.

Impact of China Cyberspace Administration Decision

On March 31, 2023, China’s Cyberspace Administration (the “CAC”) notified us that it was conducting a cybersecurity review of our products sold in China. On May 21, 2023, we received notice that the CAC had concluded its review and decided that our products presented a cybersecurity risk. As such, the CAC determined that critical information infrastructure operators in China may not purchase Micron products. The CAC decision has impacted our business, particularly in the domestic data center and networking markets in China, and we have been working to mitigate that impact. Our long-term goal is to retain our worldwide DRAM and NAND market share.
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Results of Operations

Consolidated Results

First Quarter
Fourth Quarter
First Quarter
202420232023
Revenue$4,726 100 %$4,010 100 %$4,085 100 %
Cost of goods sold4,761 101 %4,445 111 %3,192 78 %
Gross margin
(35)(1)%(435)(11)%893 22 %
Research and development845 18 %719 18 %849 21 %
Selling, general, and administrative263 %219 %251 %
Restructure and asset impairments— — %— %13 — %
Other operating (income) expense, net
(15)— %95 %(11)— %
Operating income (loss)(1,128)(24)%(1,472)(37)%(209)(5)%
Interest income (expense), net— — %— %37 %
Other non-operating income (expense), net
(27)(1)%— %(4)— %
Income tax (provision) benefit
(73)(2)%24 %(8)— %
Equity in net income (loss) of equity method investees
(6)— %— %(11)— %
Net income (loss)$(1,234)(26)%$(1,430)(36)%$(195)(5)%

Total Revenue: Total revenue for the first quarter of 2024 was impacted by the factors described in the section titled “Industry Conditions” above. Total revenue for the first quarter of 2024 increased 18% as compared to the fourth quarter of 2023 primarily due to increases in sales of both DRAM and NAND products.

Sales of DRAM products in the first quarter of 2024 increased 24% as compared to the fourth quarter of 2023 primarily due to a low-20s percent range increase in bit shipments and increases in average selling prices in the low single-digit-percent range.
Sales of NAND products in the first quarter of 2024 increased 2% as compared to the fourth quarter of 2023 primarily due to an approximate 20% increase in average selling prices partially offset by decreases in bit shipments in the mid-teens percent range after record NAND bit shipments in the fourth quarter of 2023.

Total revenue for the first quarter of 2024 increased 16% as compared to the first quarter of 2023 primarily due to increases in sales of both DRAM and NAND products.

Sales of DRAM products in the first quarter of 2024 increased 21% as compared to the first quarter of 2023 primarily due to a low-80s percent range increase in bit shipments partially offset by a decrease in average selling prices in the low-30s percent range.
Sales of NAND products in the first quarter of 2024 increased 12% as compared to the first quarter of 2023 primarily due to a high-70s percent range increase in bit shipments partially offset by a decrease in average selling prices in the high-30s percent range.

Consolidated Gross Margin: Our consolidated gross margin has been impacted by the factors described in the section titled “Industry Conditions” above. Our consolidated gross margin percentage improved to negative 1% for the first quarter of 2024 from negative 11% for the fourth quarter of 2023, as a result of improvements in margins for both DRAM and NAND products, primarily due to increases in average selling prices, and a higher mix of revenue from DRAM. Our consolidated gross margin percentage declined to negative 1% for the first quarter of 2024 from 22% for the first quarter of 2023 primarily due to declines in average selling prices for both DRAM and NAND and $165 million of facility underutilization costs in the first quarter of 2024.

27 | 2024 Q1 10-Q

Inventory NRV write-downs: Our consolidated gross margin was impacted by charges in the third and second quarters of 2023 to write down inventories to their estimated net realizable value as a result of declines in average selling prices for both DRAM and NAND. As charges to write down inventories are recorded in advance of when inventories are sold, costs of goods sold in subsequent periods are lower than they otherwise would be. The impact of inventory NRV write-downs for each period reflects (1) inventory write-downs in that period, offset by (2) lower costs in that period on the sale of inventory written down in prior periods. The impacts of inventory NRV write-downs are summarized below:

First QuarterFourth QuarterFirst Quarter
202420232023
Provision to write down inventory to NRV
$— $— $— 
Lower costs from sale of inventory written down in prior periods
605 563 — 
$605 $563 $— 

Revenue by Business Unit

First QuarterFourth QuarterFirst Quarter
202420232023
CNBU$1,737 37 %$1,200 30 %$1,746 43 %
MBU1,293 27 %1,211 30 %655 16 %
EBU1,037 22 %860 21 %1,000 24 %
SBU653 14 %739 18 %680 17 %
All Other— %— — %— %
 $4,726 $4,010 $4,085 
Percentages of total revenue may not total 100% due to rounding.

Changes in revenue for each business unit for the first quarter of 2024 as compared to the fourth quarter of 2023 were as follows:

CNBU revenue increased 45% primarily due to increases in bit shipments driven by strong demand in data center and client end markets.
MBU revenue increased 7% primarily due to increases in average selling prices and NAND bit shipments, driven by improved end market demand.
EBU revenue increased 21% primarily due to increases in bit shipments reflecting growth across most end markets.
SBU revenue decreased 12% primarily due to declines in component NAND sales, partially offset by increases in SSD sales.

Changes in revenue for each business unit for the first quarter of 2024 as compared to the first quarter of 2023 were as follows:

CNBU revenue decreased 1% as declines in average selling prices were largely offset by increases in bit shipments.
MBU revenue increased 97% primarily due to increases in bit shipments for both DRAM and NAND, partially offset by declines in average selling prices.
EBU revenue increased 4% primarily due to increases in bit shipments, partially offset by declines in average selling prices.
SBU revenue decreased 4% primarily due to declines in average selling prices, partially offset by increases in bit shipments.

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Operating Income (Loss) by Business Unit

First QuarterFourth QuarterFirst Quarter
202420232023
CNBU$(397)(23)%$(403)(34)%$190 11 %
MBU(687)(53)%(733)(61)%(195)(30)%
EBU10 %35 %194 19 %
SBU(490)(75)%(672)(91)%(257)(38)%
All Other67 %— %75 %
 $(1,560)$(1,771)$(65)
Percentages reflect operating income (loss) as a percentage of revenue for each business unit.

Changes in operating income or loss for each business unit for the first quarter of 2024 as compared to the fourth quarter of 2023 were as follows:

CNBU operating income (loss) was relatively unchanged.
MBU operating income (loss) improved primarily due to increases in average selling prices.
EBU operating income decreased slightly primarily due to declines in average selling prices.
SBU operating income (loss) improved primarily due to increases in average selling prices.

Changes in operating income or loss for each business unit for the first quarter of 2024 as compared to the first quarter of 2023 were as follows:

CNBU operating income (loss) deteriorated primarily due to declines in average selling prices.
MBU operating income (loss) deteriorated primarily due to declines in average selling prices.
EBU operating income decreased primarily due to declines in average selling prices.
SBU operating income (loss) deteriorated primarily due to declines in average selling prices.


Operating Expenses and Other

Research and Development: R&D expenses vary primarily with the number of development and pre-qualification wafers processed, the cost of advanced equipment dedicated to new product and process development, and personnel costs. Because of the lead times necessary to manufacture our products, we typically begin to process wafers before completion of performance and reliability testing. Development of a product is deemed complete when it is qualified through internal reviews and tests for performance and reliability. R&D expenses can vary significantly depending on the timing of product qualification.

R&D expenses for the first quarter of 2024 increased 18% as compared to the fourth quarter of 2023 due to higher volumes of development and prequalification wafers and an increase in employee compensation. R&D expenses for the first quarter of 2024 compared to the first quarter of 2023 were relatively unchanged as lower volumes of development and prequalification wafers were largely offset by increases in employee compensation.

Selling, General, and Administrative: SG&A expenses for the first quarter of 2024 increased 20% as compared to the fourth quarter of 2023 primarily due to an increase in employee compensation. SG&A expenses for the first quarter of 2024 were relatively unchanged compared to the first quarter of 2023.
Other operating (income) expense, net: In the fourth quarter of 2023, we recognized a charge of $101 million included in other operating (income) expense, net to impair all of the goodwill assigned to our SBU reporting unit based on a quantitative assessment for impairment.

29 | 2024 Q1 10-Q

Income Taxes: Our income tax (provision) benefit consisted of the following:
First QuarterFourth QuarterFirst Quarter
202420232023
Income (loss) before taxes$(1,155)$(1,458)$(176)
Income tax (provision) benefit(73)24 (8)
Effective tax rate(6.3)%1.6 %(4.5)%

For the first quarter of 2024, we recorded tax expense based on actual first quarter results for jurisdictions where small changes in our projected pre-tax income may cause significant changes in the estimated annual effective tax rate.

In future quarters where a reliable annual effective tax rate can be estimated for all jurisdictions, we would revert back to a global annual effective tax rate method, which may result in a significant adjustment due to the change in methodology during that period.

The change in our effective tax rate for the first quarter of 2024 as compared to the fourth quarter of 2023 was primarily due to discrete tax benefits occurring in the fourth quarter of 2023 and interim tax expense methodology in the first quarter of 2024. The change in our effective tax rate for the first quarter of 2024 as compared to the first quarter of 2023 was primarily due to changes in levels of profitability, interim tax expense methodology, and our geographic mix of earnings. Despite a consolidated pre-tax loss on a worldwide basis, we have taxes payable in certain geographies due to minimum taxable income reportable in those geographies.

We operate in a number of jurisdictions outside the United States, including Singapore, where we have tax incentive arrangements. These incentives expire, in whole or in part, at various dates through 2034 and are conditional, in part, upon meeting certain business operations and employment thresholds. As a result of a loss before taxes and geographical mix of income, the benefit from tax incentive arrangements was not material for the periods presented.

Various tax reforms are being considered in multiple jurisdictions that, if enacted, contain provisions that could materially impact our tax expense. We continue to monitor the potential impact of these various tax reform proposals to our overall global effective tax rate and financial statements.

Other: Further information can be found in the following notes contained in “Item 1. Financial Statements – Notes to Consolidated Financial Statements – Equity Plans.”


Liquidity and Capital Resources

Our primary sources of liquidity are cash generated from operations and financing obtained from capital markets and financial institutions. Cash generated from operations is highly dependent on selling prices for our products, which can vary significantly from period to period. Cash and marketable investments totaled $9.77 billion as of November 30, 2023, and $10.44 billion as of August 31, 2023. Our cash and investments consist primarily of bank deposits, money market funds, and liquid investment-grade, fixed-income securities, which are diversified among industries and individual issuers. To mitigate credit risk, we invest through high-credit-quality financial institutions and by policy generally limit the concentration of credit exposure by restricting the amount of investments with any single obligor. As of November 30, 2023, $2.56 billion of our cash and marketable investments was held by our foreign subsidiaries.

We continuously evaluate alternatives for efficiently funding our capital expenditures and ongoing operations. We expect, from time to time, to engage in a variety of financing transactions for such purposes, including the issuance of securities. As of November 30, 2023, $2.50 billion was available to draw under our Revolving Credit Facility.

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To develop new product and process technology, support future growth, achieve operating efficiencies, and maintain product quality, we must continue to invest in manufacturing technologies, facilities and equipment, and R&D. We estimate capital expenditures in 2024 for property, plant, and equipment, net of proceeds from government incentives, to be in the range of $7.5 billion to $8.0 billion. Actual amounts for 2024 will vary depending on market conditions and may vary from quarter to quarter due to the timing of expenditures. As of November 30, 2023, we had purchase obligations of approximately $1.03 billion for the acquisition of property, plant, and equipment, of which approximately $963 million is expected to be paid within one year. For a description of other contractual obligations, such as leases and debt, see “Item 1. Financial Statements – Notes to Consolidated Financial Statements – Leases,” and “ – Debt.”

To support expected memory demand in the second half of the decade, we will need to add new DRAM wafer capacity. Following the enactment of the CHIPS Act in 2022, we announced plans to invest in two leading-edge memory manufacturing fabs in the United States, contingent on CHIPS Act support through grants and investment tax credits. As part of this plan, in September 2022, we broke ground on a leading-edge memory manufacturing fab in Boise, Idaho. Construction of the fab began in October 2023 with DRAM production targeted to start in calendar 2025 and first output in early calendar 2026. In addition, in October 2022, we announced plans to build a second leading-edge DRAM manufacturing fab in Clay, New York. We expect construction to begin in calendar 2024, with production anticipated to ramp in the latter half of the decade. We expect these new fabs to be key to meeting our requirements for additional wafer capacity starting in the second half of the decade and beyond, in line with industry demand trends. On August 21, 2023, we announced that two of our subsidiaries had each submitted full applications on August 18, 2023 for federal funding in the form of grants under the CHIPS Act for both of these projects.

We are also advancing our global back-end assembly and test network in order to support our product portfolio and extend our ability to deliver on global customer demand in the future. We intend to make investments at our backend facility in Xi’an, China, including a new building to provide space to add more product capability, to allow us over time to serve more of the demand from our customers in China from the Xi’an facility. We also intend to build a new assembly and test facility in Gujarat, India to address demand in the latter half of this decade.

Our Board of Directors has authorized the discretionary repurchase of up to $10 billion of our outstanding common stock through open-market purchases, block trades, privately-negotiated transactions, derivative transactions, and/or pursuant to Rule 10b5-1 trading plans. The repurchase authorization has no expiration date, does not obligate us to acquire any common stock, and is subject to market conditions and our ongoing determination of the best use of available cash. Through November 30, 2023, we had repurchased an aggregate of $6.89 billion of the authorized amount. See “Item 1. Financial Statements – Notes to Consolidated Financial Statements – Equity.”

On December 20, 2023, our Board of Directors declared a quarterly dividend of $0.115 per share, payable in cash on January 18, 2024, to shareholders of record as of the close of business on January 2, 2024. The declaration and payment of any future cash dividends are at the discretion and subject to the approval of our Board of Directors. Our Board of Directors' decisions regarding the amount and payment of dividends will depend on many factors, including, but not limited to, our financial condition, results of operations, capital requirements, business conditions, debt service obligations, contractual restrictions, industry practice, legal requirements, regulatory constraints, and other factors that our Board of Directors may deem relevant.

We expect that our cash and investments, cash flows from operations, and available financing will be sufficient to meet our requirements at least through the next 12 months and thereafter for the foreseeable future.

Cash Flows

First Quarter
20242023
Net cash provided by operating activities$1,401 $943 
Net cash provided by (used for) investing activities(1,558)(2,266)
Net cash provided by (used for) financing activities(352)2,632 
Effect of changes in currency exchange rates on cash, cash equivalents, and restricted cash(1)(6)
Net increase (decrease) in cash, cash equivalents, and restricted cash$(510)$1,303 
31 | 2024 Q1 10-Q


Operating Activities: Cash provided by operating activities reflects net income (loss) adjusted for certain non-cash items, including depreciation expense, amortization of intangible assets, and stock-based compensation, and the effects of changes in operating assets and liabilities. The increase in cash provided by operating activities for the first quarter of 2024 as compared to the first quarter of 2023 was primarily due to a larger net loss in the current year adjusted for non-cash items and the effect of an increase in receivables, which was more than offset by a decrease in inventories, an increase in accounts payable and accrued expenses, and an increase in other current liabilities largely due to approximately $600 million of customer prepayments to secure product supply.

Investing Activities: For the first quarter of 2024, net cash used for investing activities consisted primarily of $1.80 billion of expenditures for property, plant, and equipment; contributions of $85 million received from government incentives to offset capital expenditures; partially offset by $175 million of net inflows from maturities, sales, and purchases of available-for-sale securities.

For the first quarter of 2023, net cash used for investing activities consisted primarily of $2.45 billion of expenditures for property, plant, and equipment; partially offset by $272 million of net inflows from maturities, sales, and purchases of available-for-sale securities.

Financing Activities: For the first quarter of 2024, net cash used for financing activities consisted primarily of $129 million for payments of dividends to shareholders, $56 million of payments on equipment purchase contracts, and $53 million for repayments of debt.

For the first quarter of 2023, net cash provided by financing activities consisted primarily of $2.60 billion of proceeds from our 2025, 2026, and 2027 Term Loan A borrowings and $749 million (net of original issue discount) from the issuance of the 2029 B Notes. Cash used for financing activities included $425 million for the acquisition of 8.6 million shares of our common stock under our share repurchase authorization, $126 million of cash payments of dividends to shareholders, and $47 million of payments on equipment purchase contracts.


Critical Accounting Estimates

For a discussion of our critical accounting estimates, see “Part II – Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Estimates” of our Annual Report on Form 10-K for the year ended August 31, 2023. There have been no significant changes to our critical accounting estimates since our Annual Report on Form 10-K for the year ended August 31, 2023.


Recently Adopted Accounting Standards

No material items.


Recently Issued Accounting Standards

No material items.


ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

For further discussion about market risk and sensitivity analysis related to changes in interest rates and currency exchange rates, see “Part II – Item 7A. Quantitative and Qualitative Disclosures About Market Risk” in our Annual Report on Form 10-K for the year ended August 31, 2023.


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ITEM 4. CONTROLS AND PROCEDURES

An evaluation was carried out under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. Based upon that evaluation, the principal executive officer and principal financial officer concluded that those disclosure controls and procedures were effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act are recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including the principal executive officer and principal financial officer, to allow timely decisions regarding disclosure.

During the first quarter of 2024, there were